NEWS: Reedy Creek Employees Facing $2 MILLION in Back Taxes Over Free Disney Benefit

Imagine walking into work and opening your email, only to find that a beloved company benefit has resulted in you owing the IRS millions of dollars — that is a reality RCID employees are now facing. 

©Orlando Sentinel

Governor Ron DeSantis’ takeover to convert the Reedy Creek Improvement District into the Central Florida Tourism Oversight District has been met with divisive opinions from both taxpayers and employees. And if you remember a particular Disney World perk that was offered free to employees for years during the board’s time as the RCID,  it’s now become a hot topic again that’s at the center of a huge tax bill.

Employees working for Governor Ron DeSantis’ Central Florida Tourism Oversight District may have been shocked to learn that they owe the Internal Revenue Service more than $2 million in back taxes. The news was broken to employees through an internal memo according to the Orlando Sentinel.

©Central Florida Tourism Oversight District

The huge tax bill seems to stem from a former yearly perk of complimentary Disney World annual passes given to employees of the former Reedy Creek Improvement District according to district administrator, Glen Gilzean. Gilzean penned an email to employees addressing concerns over the bill.

©Central Florida Tourism Oversight Board

“[I]t has come to the attention of the district administration that the previous leadership chose not to inform staff about their IRS obligations to pay legally owed taxes on season pass benefits,” said Gilzean.“This has resulted in our employees owing over $2 million in income back taxes.” “The Central Florida Tourism Oversight District is working to resolve the matter by covering the back taxes owed by employees and retirees and is awaiting a response from the IRS,” Gilzean wrote.

Employees of the district have raised concerns to leadership indicating they were unaware of the tax liability, and in an email from Matthew Oberly, a district spokesperson, he indicated that “CFTOD team members have communicated they appreciate the administration’s willingness to absorb a significant financial burden that accumulated over the past several years.”

Reedy Creek Building

Around 400 people work for the oversight district, which people may remember has been at the center of DeSantis’ legal battle with Disney. DeSantis hand-picked the new CFTOD board to replace Disney-friendly members this past February as part of a state takeover of the previously established board known as the Reedy Creek Improvement District (RCID).

When the new board members took over, one of their first orders of business was to evaluate and tweak employee benefit programs, and they took a particular interest in one that provided Disney World annual passes and discounts to employees. The newly appointed board accused the previous administration of maintaining an “unethical” program that unfavorably benefited Disney over other Central Florida businesses. However, when the board proposed a yearly $3,000 stipend in place of the former benefit, they were met with backlash from some employees who maintained this perk was a key factor in their decision to work there.

Annual Pass

According to Orlando tax attorney Charlotte A. Erdmann (who’s neither a part of the district nor entirely looked over the case yet), if the IRS finds that taxes were never paid on the Disney World park passes, both the district and the employees could face tax implications.

“The Disney passes were likely a taxable benefit, similar to wages or bonuses,” said Erdmann. “Due to the nature of the benefit, they were unlike cafeteria plans, medical benefits and other pre-tax benefits. They are also of substantial value.”

©Central Florida Tourism Oversight Board

Although the proposed strategy to resolve the tax bill has not been publicly discussed, Erdmann shared that if the district pays the tax liability, including that of its employees, the taxpayers would be the ones out of millions to clear up the bill. It’s also important to keep in mind that Disney and its affiliates pay about 86% of the district’s property taxes.

©Reedy Creek

Gilzen also attempted to curb heightened employee concern over the uncertainty of the bill and can only offer this piece of assurance to employees for now, “Please be assured that we are diligently working to resolve this matter as soon as possible.”

While the outcome of this matter is still to be clarified, we’ll be interested to see just exactly how the district can satisfy all the parties involved including the IRS, taxpayers, and employees while still maintaining the district’s approval. Be sure to stay tuned with us for more on this and other Disney news.

NEWS: DeSantis’ Reedy Creek Leaders Fired Following Reports District Is “No Longer Functional

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18 Replies to “NEWS: Reedy Creek Employees Facing $2 MILLION in Back Taxes Over Free Disney Benefit”

  1. Let me see if I recall anything similar to this ever happening…….oh yeah a guy who was the CFO getting a free car and free apartment in a luxury tower and that never got reported to the IRS. And the guy who provided those perks who did not report it….became president of the United States. But he has never so much as told a white lie in his entire life. Why doesn’t Disney send a letter to the IRS saying this wasn’t a perk. They were on call at all times and needed to be able yo get into the parks. Sort of giving them the key to the office.

  2. Shouldn’t fall on the tax payers we didn’t receive this perk. It should be between the employees and the board. If the board can’t cover it it, then those who got the perk should. Leave my money out of it.

  3. It is well known that if you receive benefits above compensation, it’s taxable to the Feds.

    This isn’t DeSantis, it’s the IRS. Florida doesn’t tax income.

  4. Absolutely not. It’s no different then all the perks the Republicans like Ali to Thomas, and everyone in Congress.
    It’s a perk not taxable as they say about Thomas.
    Think about it

  5. Just Desintis and Greedy Creek throwing stones again. Brings to mind a judge who got a bunch of $$$ freebies. Did he pay taxes!!?
    Speaking of taxes why can’t the people of Florida see where their tax dollars are being spent. Ron the Con made sure that would t happen for now.

  6. So for years the IRS didn’t know about this? And somehow it just popped up on their radar screen? After the new board took away the perk? And now the employees are on the hook for $2 million? I imagine if no one had told the IRS, it never would have been a problem. So who squealed? And as much as you could argue the employees should have known better or that Disney should have told them it was taxable, I’d like to know one other thing….Do DeSantis and the people on this board have any money they would rather the IRS not know about? I bet they all do. But when you drop to the lower income levels stuff like this makes you a crook. At the upper income levels the exact same behavior makes you smart.

    1. I read the new board wrote the IRSthat they rhink there is an issue because they want to be ethical and’s that for hypocrisy

  7. the new normal.
    any fringe benefit including disney dollars on your visa credit card
    are considered taxable income.
    the faze out of cash will cause every person that works for wages
    to re-examine their work envoriment.

  8. I think Disney corporate/stock holders should be footing the bill…it was under their watch that discounts and giveaways were gifted to the employee…as a perk. Going forward, this perk should disappear but not just for Disney employees…open the books on Universal…SeaWorld… Busch Gardens and any other businesses that rewards their employees with similar perks. They’re opening up a can of worms…

    1. So I guess that the Disney passes for the cast members will have to be taxed too. Just like all other parks in Florida and all corporate parks are going to have to be taxed too. It’s just a political ploy to show that this Desanctimonious is watching out for tax dollars and every angle. Nothing is free without having Uncle Sam taxing you for it.

  9. Work benefits outside of medical, dental, etc are taxable. that’s pretty much common knowledge. the previous board would have been reporting this benefit to the IRS for years and years. Something is fishy with the story the new board is presenting. It just doesn’t make any sense. The annual pass has likely been a perk for a long time. Maybe Disney paid the taxes for the board directly and that stopped with the switch

    1. I agree, there is no way Disney was not paying the taxes on this benefit , as it’s a bonus for every employee for years. This seems off